Why is America falling behind in global competitiveness? This simple infrastructure spending chart shows why

March 12, 2013 at 4:52 pm

(via Wall Street Journal)

Bridging the investment gap

The U.S. spending on transportation (and infrastructure in general) has flatlined (or some argue that it has declined considerably) over the decades while other countries around the globe, especially in Asia, have ramped up their investment in large-scale infrastructure projects such as building highways and railroads.  So, how does it look when we match our spending versus the other nations.  This chart from Wall Street Journal shows show you how badly we are behind in this race to stay competitive. Recommend reading the related article on WSJ that shows how funding for infrastructure projects may be coming from new sources as ‘wealth advisers are steering clients into infrastructure deals. Let’s not forget that we have already a crazy amount of things to fix and on top of that we have to spend on projects that can cater to the growing need for transportation as the population explodes.  But do we really have the money to fix the broke and embark on starting new projects? With a dwindling highway trust fund account and a political gridlock in Washington, even the basic of needs for keeping the country economically superior seems to be a bigger challenge than ever.

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America Loves a Good Come Back! President Obama Lauds GM’s Evolution From Detroit’s Dud to Wall Street’s Darling

November 18, 2010 at 7:35 pm

(Sources:  White House.gov & Freep.com)

Watching GM turn the corner from a disastrous dud and morph into a Detroit’s Stud and a Wall Street darling, no could’ve been happier than President Obama and his team of economic advisors at the White House, who advised him on the bailout that rescued thousands of jobs and the iconic brand from a collapse.  The stunning turnaround culminated with a successful IPO debuting in the marketplace today. General Motors stock closed at $34.19 today, just above the $33 price of the initial public offering.

An elated President Obama convened a press conference this afternoon and shared his sentiment and belief in GM’s recovery strategy.

Today, one of the toughest tales of the recession took another big step towards becoming a success story.

General Motors relaunched itself as a public company, cutting the government’s stake in the company by nearly half.  What’s more, American taxpayers are now positioned to recover more than my administration invested in GM.

And that’s a very good thing.  Last year, we told GM’s management and workers that if they made the tough decisions necessary to make themselves more competitive in the 21st century — decisions requiring real leadership, fresh thinking and also some shared sacrifice –- then we would stand by them.  And because they did, the American auto industry -– an industry that’s been the proud symbol of America’s manufacturing might for a century; an industry that helped to build our middle class -– is once again on the rise.

Our automakers are in the midst of their strongest period of job growth in more than a decade.  Since GM and Chrysler emerged from bankruptcy, the industry has created more than 75,000 new jobs.  For the first time in six years, Ford, GM and Chrysler are all operating at a profit.  In fact, last week, GM announced its best quarter in over 11 years.  And most importantly, American workers are back at the assembly line manufacturing the high-quality, fuel-efficient, American-made cars of tomorrow, capable of going toe to toe with any other manufacturer in the world. Click here to read the president’s entire speech.

Freep’s awesome cartoonist Mike Thompson charts this wonderful recovery from a dud to a darling with a series of cartoons on his blog.  He also adds the following to go with his nice drawings:

As if this weren’t bad enough for auto bailout critics, the Ann Arbor-based Center for Automotive Research has released a report that validates the logic behind the bailout. As Free Press business writer Greg Gardner reported, “The CAR study says the federal government would have spent $28.6 billion more than it did on unemployment benefits, Medicare, Social Security and other programs had the automakers liquidated. So the entire rescue will pay for itself if the government can generate $38 billion from selling its shares.” But perhaps the most chilling details in the story were the report’s conclusions that liquidation of the two auto companies would have meant the loss of 1.4 million jobs and $121 billion in personal income.

Whew!  This above facts-full paragraph must be making many of the naysayers, like the conservative columnist Mr. George Will feel like throwing up.  A couple of days ago, he wrote an op-ed titled , Toxic Volt, on Washington Post saying a whole lot of negative things about the President’s Bailout for GM.  The President and Steven Rattner, the brains behind the execution of the bailout plan, should be chuckling over the phone talking about how bad they feel for George Will.  Sadly enough, the doubters still continue to find a way to question the legitimacy of success. Fox Business  News in an article on its website says massive dilution from existing shares, warrants and grants, as well as unfunded pension costs. And GM’s cash flow is still heavily reliant on tens of billions of dollars in tax breaks and taxpayer-backed loans from the Dept. of Energy.

  Image Courtesy: Freep.com

Image Courtesy: Freep.com

If this is not victory enough for the President, today GM notched another impressive feat, which is more like a beautiful foil to the wonderful present inside – the IPO. The Detroit Free Press reports that the Chevrolet Volt extended-range electric vehicle has won Green Car of the Year, beating out the pure-electric Nissan Leaf, hours after General Motors returned to the stock market. The award, decided by judges that include environmental enthusiasts and Green Car Journal editors, comes the same week as the Volt won MotorTrend Car of the Year and Automobile Magazine’s Automobile of the Year.  How awesome could that for a man who was chided constantly by his opponents for the decisions he made to save the brand and the thousands of jobs associated with the existence of the brand.

I bet tonight the President of the United States will have a drink to celebrate one of his biggest victories since assuming office.  He will probably sleep a little better tonight with one less thing to worry about.

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Toyota reports worst annual loss ever; warns of deeper plunge into the red this year

May 8, 2009 at 9:17 am

 (Source:  BBC & NYTIMES)

Toyota, the world’s biggest carmaker, has made its worst annual loss as the global economic downturn has hit demand for its vehicles.  The Japanese company said it made a net loss of 436.94bn yen ($4.4bn; £2.9bn) in the year to 31 March, compared with a record profit the year before.

Toyota said expected to make a bigger loss in the current financial year.  Like many of its rivals, Toyota has cut production, including at its UK plants, as sales have declined. Toyota also blamed the loss on high raw materials prices and a strong yen, which makes its cars more expensive overseas.   “Both revenues and profits declined severely during this period,” said Toyota president Katsuaki Watanabe. He said the loss “was a consequence of the significant deterioration in vehicle sales, particularly in the US and Europe”.

Toyota said it expected to make a net loss of 550bn yen ($5.5bn; £3.7bn) in the financial year ending in March 2010.

Analysts say Toyota has strong cash reserves, and is far from the bankruptcy that has claimed the American carmaker Chrysler and that threatens General Motors. Despite a $15.4 billion infusion in U.S. government loans, General Motors burned through about $10 billion in the first quarter, driving its cash reserves down to a bare minimum and putting it on the brink of collapse.

Still, Standard & Poor’s, the ratings agency, on Friday lowered its long-term credit rating on Toyota a notch to AA, the third-highest rating, and gave a “negative” outlook for the company.

“Toyota maintains a minimal financial risk profile, characterized by a strong capital structure with massive liquidity,” Standard & Poor’s said in a statement. But with auto demand forecast to remain sluggish into 2010, Toyota will likely struggle before it can stage a recovery, Standard & Poor’s said.

Toyota’s latest forecast paints a grim picture for the year ahead. Toyota has been hit hard in its biggest market, the United States, where sales have plunged and show few signs of recovering.

In April, Toyota sold 126,540 cars in the United States — a 42 percent drop from a year earlier — slipping behind Ford Motor, which sold almost 130,000 cars.

Toyota has also suffered double-digit percentage drops in Japan as well as in China, where it is losing out to rivals with a wider lineup of smaller cars that have surged in popularity.

Toyota sold 7.56 million vehicles in fiscal 2008, down from 8.91 million units in its blockbuster 2007.

The company has so far held off from laying off permanent workers, who enjoy lifetime employment guarantees. Toyota says that guarantee is a key part of its “kaizen” management principle, in which workers are required to constantly suggest ways to be more productive. But some analysts question how long Toyota can hold off from deeper cuts.

Toyota is counting on its third-generation Prius hybrid, which will be unveiled later this month in Japan, to buoy sales. But the automaker faces stiff competition from its Japanese rival, Honda Motor, whose low-cost Insight hybrid is expected to eat into Toyota’s market share.

In a filing with the Japanese Finance Ministry, it indicated it may sell as many as ¥700 billion in bonds in the next two years, Bloomberg news reported.

The automaker is also rallying around its iconic founding family, tapping Akio Toyoda, the company founder’s grandson, to replace Mr. Watanabe next month. Mr. Toyoda has said he will focus on “green” technology like hybrids and plug-in electric vehicles to bring about a long-term recovery.

The automaker could also benefit from Japanese government stimulus efforts.

Last month, officials unveiled a so-called cash-for clunkers program under which car owners who upgrade to “green” vehicles from cars that are at least 13 years old will receive government subsidies.

NYC financial workers see low-flying planes, panic

April 27, 2009 at 12:04 pm
In this image taken with a cell phone by Jason McLane, the primary presidential aircraft, a Boeing 747 known as Air Force One when the president is aboard, flies low over New York Harbor, followed by an F-16 chase plane during a federal government photo op Monday, April 27, 2009. A low-flying Boeing 747 escorted by two fighter jets as part of a federal government photo opportunity over lower Manhattan caused a brief panic among workers near ground zero on Monday. (AP Photo/Jason McLane)

In this image taken with a cell phone by Jason McLane, the primary presidential aircraft, a Boeing 747 known as Air Force One when the president is aboard, flies low over New York Harbor, followed by an F-16 chase plane during a federal government photo op Monday, April 27, 2009. A low-flying Boeing 747 escorted by two fighter jets as part of a federal government photo opportunity over lower Manhattan caused a brief panic among workers near ground zero on Monday. (AP Photo/Jason McLane) (Jason Mclane - AP)

(Source: Washington Post)

NEW YORK — A Boeing 747 used by the president was escorted over lower Manhattan by two Air Force fighter jets Monday as part of a government photo opportunity, causing a brief panic among office workers near ground zero.

Workers from several office buildings poured out onto the streets before they learned that the flights were innocuous.

John Leitner, a floor trader at the New York Mercantile Exchange Building, said about 1,000 people “went into a total panic” and ran out of the building around 10 a.m. after seeing the planes whiz by their building, near the World Trade Center site.

“Apparently, nobody in the building was informed that this was going to happen,” he said. “Everyone panicked, as you can certainly understand.”

He said the workers gathered along the Hudson River esplanade until a security officer with a bullhorn told them it was a planned exercise.

The Federal Aviation Administration said the government was conducting a photo op involving two Air Force F-16 jets and the larger airplane, a Defense Department version of the 747 that is called Air Force One when the president is aboard. It said it notified city law enforcement about the mission.

The NYPD said the flight “was authorized by the FAA for the vicinity of the Statue of Liberty, with directives to local authorities not to disclose information about it, but to direct all inquiries to the FAA.”

Among the workers who left their buildings were some at The Wall Street Journal.   Here is a video from WSJ showing the aircraft flying near the buildings. 

 

Click here to read the entire article.

The “Chosen One” – NY Times profiles Obama’s Car Czar-lite, Mr. Steven Rattner

April 8, 2009 at 12:01 am

(Source:  New York Times; Photo: Jay Mailin/Bloombern News)

Obama’s Top Auto Industry Troubleshooter

After 26 years as one of the most politically connected investment bankers on Wall Street, Steven Rattner finally took a job in Washington — only it is not quite the one friends and business associates thought it would be.
Washington buzzed that Mr. Rattner, a big name in the New York media world who, friends say, aspires to a cabinet post like Treasury secretary, would be named the car czar of the Obama administration. Instead, he is one of 14 people on a committee that is orchestrating the rescue of the giant automakers.

Still, Mr. Rattner, a well-known media banker, is playing a central role as car czar lite, traveling to Detroit to visit plants, meeting with the automakers’ bankers, unions and bondholders, and advising the White House on which companies seem salvageable and how. If he succeeds, he may get a chance at a larger job in the administration.

That is a big if. He has to push the car companies to overhaul decades-old practices, persuade his former colleagues on Wall Street to lower their demands on the automakers’ debt payments and appeal to union leaders who may be turned off by Mr. Rattner’s financial success.

Mr. Rattner said in an interview that he has long been interested in returning to Washington, where he worked as a newspaper reporter 30 years ago, and that he hoped to stay on for some time to work on aspects of the financial crisis.

“In the fall, as the economic crisis intensified, it became clearer and clearer to me that this was a moment of historic importance,” Mr. Rattner said, “and if one was ever to have an interest in serving your country in the area of economic policy, this was the moment.”

Mr. Rattner has been among the most politically connected people in the banking industry. He and his wife, Maureen White, who together have been referred to by New York magazine as the “D.N.C.’s A.T.M.,” have hosted many Democratic fund-raisers at their lavish apartment on Fifth Avenue. They were initially Clinton supporters, but they hosted events for Barack Obama after he sealed the nomination.

Click here to read the entire article.